The Shyft Group (SHYF) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales declined 14% year-over-year to $192.8M, with operational improvements, cost actions, and margin gains despite market softness.

• Acquired Independent Truck Upfitters (ITU) for $46M cash plus up to $8M earnout, expanding upfit capabilities and aligning with growth strategy.

• Received a 150-unit Blue Arc EV order from FedEx; Blue Arc production and deliveries are on track for late 2024, with ramp-up in 2025.

• Raised 2024 adjusted EBITDA outlook to $45M–$50M, reflecting improved profitability and strategic actions.

• Focused on operational efficiency, organizational changes, and increased customer engagement to drive results.

Financial highlights

• Q2 2024 sales were $192.8M, down 14% year-over-year; net income was $2.2M ($0.06 per share), down from $4.7M ($0.13 per share).

• Adjusted EBITDA was $12.5M (6.5% of sales), down from $15.9M (7.0%) last year; adjusted net income was $5.3M; adjusted EPS was $0.16.

• Gross margin improved to 21.1% from 19.0% year-over-year.

• Consolidated backlog at June 30, 2024 was $354.4M, down over 30% year-over-year.

• Free cash flow for the first half of 2024 was $(12.0)M, compared to $24.7M in the prior year period.

Outlook and guidance

• 2024 sales expected between $800M–$850M, with ITU contributing ~$25M and adjusted EBITDA guidance raised to $45M–$50M.

• Adjusted EPS forecasted at $0.35–$0.50; net income guidance $2.6M–$6.9M.

• Free cash flow projected at $25M–$35M; capex of $20M–$25M.

• No Blue Arc sales included in 2024 outlook; Blue Arc production and deliveries to begin in 2024, with ramp-up and profit benefits in 2025.

• ITU expected to add $3M–$4M adjusted EBITDA from August–December 2024.